Leader of W.T.O. Says Russia's Interest in Joining Has Waned

By MATTHEW SALTMARSH

Published: October 3, 2009

Russia's appetite for joining the World Trade Organization appears to have evaporated, even though the trade group has been proving its mettle in discouraging protectionist reactions during the recent financial upheaval, the head of the W.T.O. said Friday.

Russia, the most economically important country outside the W.T.O., has been pursuing membership for 16 years and in 2004, signed a trade deal with the European Union to pave the way for its admission.

In a wide-ranging interview, the head of the W.T.O., Pascal Lamy, said Russia seemed to be less interested today.

He pointed to the announcement in June by the Russian prime minister, Vladimir V. Putin, that Russia, Kazakhstan and Belarus would pursue W.T.O. membership jointly as a customs union -- something for which there is no precedent under W.T.O. rules.

''It will make the application of Russia much more complex,'' Mr. Lamy said. ''It will run even longer.''

''The fundamental reality is that there is no energy in Moscow to join'' any more, said Mr. Lamy, who five years ago, as the European trade commissioner, negotiated the deal with Moscow. Mr. Lamy started his second term as director general of the W.T.O. last month.

The reasons for the waning enthusiasm, analysts say, are tied to domestic politics, the composition of Russia's energy-heavy exports and a suspicion of the motives of the West.

Joining the group that sets rules for globalization had been a major foreign policy goal of Mr. Putin, so his pivot this summer -- to say that Russia would join only in a customs union -- baffled trade negotiators.

In Moscow, however, the change in stance was seen as reflecting a fault line in the government over economic policy.

Aides to President Dmitri A. Medvedev had been pushing W.T.O. membership as a tool to help diversify the economy away from oil exports. Supporters of Mr. Putin have argued instead for an emphasis on increasing earnings from oil and raw materials exports.

By last month, the apparent rift had grown so wide that Mr. Medvedev felt compelled to contest the characterization of the W.T.O. membership debate as signifying a public split with the powerful Mr. Putin.

''In the W.T.O., they started to say that the president has one point of view, the prime minister another on this question,'' Mr. Medvedev said, according to the news agency Interfax. ''That's a mistake. The decision on how we will join has been taken.''

The attitudes of Russia and China toward the W.T.O. have been ''like night and day,'' Mr. Lamy said.

That might largely be explained by China's much greater dependence on exports of manufactured goods. Beijing joined the W.T.O. in 2001 ''as an insurance against protectionism, to enhance domestic development,'' Mr. Lamy said.

That insurance policy seems to have paid off -- so far -- during the global slowdown, he said.

''For many, the importance of discipline is even higher today than it was before the shocks,'' he added.

But the ''real stress test for the W.T.O.'' is likely to come in the next year or two as unemployment is expected to rise in developed countries, even as economies recover, putting global trading under more stress.

Mr. Lamy said the additional pressure meant that progress on the next round of talks on removing trade barriers, known as the Doha round, was even more imperative, to provide more ''predictability'' to the system.

Those talks were kicked off in Doha, Qatar, in 2001 and have progressed bumpily. They have been marked by a newfound assertiveness on the part of a group of developing countries in the face of the established Western economic powers.

The financial crisis has ''hugely increased the importance of these W.T.O. negotiations for developing countries, which depend much more than developed countries on trade,'' Mr. Lamy said. ''They don't have access to huge public funds to bail out their industry, so for them, trade is the only way out.''

PHOTO: Pascal Lamy, head of the W.T.O., said domestic politics had changed Russia's stance.(PHOTOGRAPH BY TIM CHONG/REUTERS)